Q3FY21 Result Update - Indraprastha Gas - ICICI Direct

Indraprastha Gas (IGL) reported its Q3FY21 numbers that were above our estimates on the operating front. Volumes fell 6.5% YoY to 6.3 mmscmd (our estimate: 6.4 mmscmd). Volumes increased 13.8% QoQ as CNG and industrial PNG demand is recovering post relaxations in lockdown. Revenues fell 13.1% YoY to Rs. 1446.2 crore (our estimate: Rs. 1476.2 crore). Gross margins increased Rs. 2.8/scm YoY owing to low gas costs. EBITDA increased 27.8% YoY to Rs. 500.7 crore (our estimates: Rs. 465 crore). Subsequently, PAT came in at Rs. 334.9 crore, up 18% YoY (our estimate: Rs. 330.1 crore) as the company reported lower other income.

Valuation & Outlook

The environmental concerns in Delhi had brought forth the urgency of using cleaner fuels, putting the company in a sweet spot. IGL has a unique identity of a company with a rare mix of volume growth and strong margins. In the near term, while industrial/commercial PNG have recovered faster, CNG sales are yet to recover fully. Considering sharp run up un the stock price, we maintain HOLD recommendation on the stock. We roll over valuations to FY23E and value standalone IGL at Rs. 550/share (22x FY23E EPS) and investment in Central UP Gas (CUGL) and Maharashtra Natural Gas (MNGL) at Rs. 45/share to arrive at a target price of Rs. 595 (earlier Rs. 490/share).

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_IGL_Q3FY21.pdf

Shares of INDRAPRASTHA GAS LTD. was last trading in BSE at Rs.541.5 as compared to the previous close of Rs. 559.65. The total number of shares traded during the day was 75623 in over 1918 trades.

The stock hit an intraday high of Rs. 561 and intraday low of 540. The net turnover during the day was Rs. 41361066.

Source : Equity Bulls

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